CBO Report May be the Death Blow to ObamaCare


By: John Poderitz

The Affordable Care Act, a k a ObamaCare, became law almost four years ago. It became operational last Oct. 1. Yesterday, Feb. 4, 2014, the ACA may well have been dealt its death blow.

The Congressional Budget Office released a major study of the government’s budget and its effect on the overall economy over the next 10 years. In dull bureaucratic language, it delivers a devastating analysis of the inefficiencies, ineffectualities and problematic social costs of ObamaCare.

The one-two punch: Virtually as many Americans will lack health coverage in 10 years as before the law was passed — but 2 million fewer will be working than if the law hadn’t passed.

One killer detail comes on Page 111, where the report projects: “As a result of the ACA, between 6 million and 7 million fewer people will have employment-based insurance coverage each year from 2016 through 2024 than would be the case in the absence of the ACA.” ObamaCare’s key selling point was that it would give coverage to a significant number of the 30-plus million Americans who lack it. Now the CBO is telling the American people that a decade from now, 6 million-plus of their countrymen won’t get health care through their employers who otherwise would have.

Even more damaging is this projection: “About 31 million nonelderly residents of the United States are likely to be without health insurance in 2024, roughly one out of every nine such residents.”

Why? Because, in selling the bill to the American people in a nationally televised September 2009 address, President Obama said the need for ObamaCare was urgent precisely because “there are now more than 30 million American citizens who cannot get coverage.”

Now the CBO is saying is that in 10 years, about the same number of people will lack insurance as before. This, after new expenditures of as much as $2 trillion and a colossal disruption of the US medical system.
If that’s not startling enough, there’s also the telling projection about ObamaCare’s impact on employment — “a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024.”

Overall employment will rise, the report says, but not steady, secure, long-term assured employment. The possibility of securing government-provided health-care without employment will give people a new incentive to avoid it. “The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply,” the report says.

Indeed, overall, between 2017 and 2024, the actual amount of work done in this country will decline by as much as 2 percent.

How come? Because of perverse incentives ObamaCare provides in the form of subsidies to some and higher taxes to others.

First, the report says Americans will “choose to supply less labor — given the new taxes and other incentives they will face and the financial benefits some will receive.”

Here’s why: Poor people get certain subsidies, which disappear once a worker achieves a certain level of compensation. So it may be better to work less, or not work at all, rather than reach that higher pay level, because the pay increase won’t offset the loss of the subsidy.

This is the classic problem of a government handout: It can become more alluring to those who receive it than the prospect of a life lived without it.

As the report says, “If those subsidies are phased out with rising income in order to limit their total costs, the phaseout effectively raises people’s marginal tax rates [the tax rates applying to their last dollar of income], thus discouraging work.”

There’s a problem on the other end as well — among those whose tax dollars pay for the whole shebang: “If the subsidies are financed at least in part by higher taxes, those taxes will further discourage work or create other economic distortions, depending on how the taxes are designed.”

The White House hastened to do damage control yesterday, and the “senior official” who did the background briefing for reporters said a shocking thing: The projected decline in work is good news.

“It reflects the fact that workers have a new set of options and are making the best choices that they can choose to make for themselves given those options,” the official said.

Really? Really? You know, if that’s the best they can do, certain American workers — those elected to Congress and their staffs — might find themselves forced to make new choices regarding their employment come this November and November 2016.

For the past year, Obama and his supporters have taken to demanding that ObamaCare’s opponents quit trying to undo it because it’s now the law of the land.

Not so fast: With this and the other blows it has been dealt over the past six months, and undoubtedly with new blows to come, ObamaCare really and truly may no longer be the law of the land after the president leaves office.


    • Not so much, if you see fit to read the report itself, instead of a twisted interpretation of it.

    • Depends on their skill set & the job duties at hand. Bottom line is employers don’t need to work around the employees but the employees need to do whatever it takes to make the business as profitable as possible. Otherwise, what use does the business have for said employee?

  1. barrycare = more liberation for the libtards………barry should have at least thrown in a cuban cigar or a clinton oval office cigar…. on second thought that clinton cigar might not be covered under obamacare………..

  2. That would fall under the CDC’s jurisdiction tommi.

    Center for Disease Control.

  3. There is nothing surprising about this report. People who bothered to read the bill before it was passed knew it was a disaster in the making which was going to reduce jobs, as employers cut back hours to avoid the penalties, and cost trillions extra for the middle class taxpayers who have to cough up the money for the subsidies, and to pay the higher premiums of Obamacare mandatory insurance policies.

  4. You neither read the bill nor the analysis of the CBO report. I can’t say the CBO report was very flattering to the ACA or that the admistration should ignore it is just your comments of more of the ridiculous false narrative about the ACA.

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